A South Florida company that collected more than $100 million in premiums selling sham health insurance “for smart people” through a network of deceptive websites, including one called trumpcarequotes.com, was ordered by a federal judge to temporarily shut down following consumer complaints to the Federal Trade Commission.
Simple Health Plans, based in Hollywood, lured “tens of thousands” of consumers with false promises of covering pre-existing medical conditions and prescription drugs for monthly premiums ranging from $40 to $500, the FTC said in a 28-page complaint recently unsealed by a federal judge.
The complaint against Simple Health and its owner, Steven Dorfman, and five other businesses, alleges that the plans were either a medical discount program or offered very limited benefits that did not deliver on promised coverage. Dorfman and the other defendants are charged with violating the FTC Act and the agency’s Telemarketing Sales Rule.
“Many consumers were misled into thinking they had purchased comprehensive health insurance, but when they needed to rely on that insurance, they learned they had none of the promised benefits,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a press release.
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Ryan O’Quinn, an attorney representing Dorfman, said in an email that his client “vigorously denies” the FTC’s allegations. “He looks forward to having an opportunity to defend himself in the appropriate forum,” O’Quinn said.
In addition to Dorfman, the FTC’s complaint names as defendants six Florida companies in which Dorfman is an officer, member, or manager, including Simple Health, Health Benefits One, Health Center Management, Innovative Customer Care, Simple Insurance Leads and Senior Benefits One.
The FTC said Dorfman and the companies used websites such as trumpcarequotes.com to deceive consumers into thinking the entities provided government-sponsored health insurance policies, such as those offered under Medicare and the Affordable Care Act. The websites also featured the logos of well-known insurance carriers, even though Simple Health and the other companies were not affiliated with those insurers, according to the FTC’s complaint.
A federal judge granted the FTC’s request for a temporary restraining order to shut down the companies and also froze the assets of Simple Health, which had promised many consumers insurance with no co-payments or deductibles, and access to a broad network of doctors and hospitals.
In reality, though, Simple Health covered very little, the FTC said.
The plans provided no coverage for pre-existing medical conditions or prescription drugs, covered only $50 toward physician visits — capped at three visits per year — and benefits maxed out at $100 per day for hospitalizations, the FTC’s complaint alleged. The maximum benefit a Simple Health consumer could realize from the plan was valued at $3,200 per person per year — and only if that person were hospitalized for 30 days.
The FTC said consumers who thought they had bought comprehensive health insurance discovered they were actually uninsured, including some who were saddled with medical bills they had assumed would be covered by Simple Health.
And because the plans did not qualify as health insurance under the Affordable Care Act, which requires coverage of pre-existing conditions and a broad range of benefits, consumers who bought Simple Health plans were subject to the health law’s individual mandate that imposes a financial penalty on persons who can afford qualifying insurance but choose not to buy it.
The Trump administration has eliminated the individual mandate beginning for 2019 coverage. Open enrollment for Affordable Care Act coverage, also known as Obamacare, launched on Nov. 1 and runs through Dec. 15.
This story was updated on Nov. 7 with a statement from Dorfman’s attorney.